Spotlight

Indian equities are likely to extend their recovery, supported by improving global sentiment and a positive close across U.S. markets overnight. Asian markets are also trading largely steady, with the Nikkei 225 and KOSPI posting marginal gains, providing a relatively supportive external backdrop for domestic equities. The recovery, however, is likely to remain sensitive to shifts in the global macroeconomic and geopolitical environment.

Geopolitical risks remain elevated, while crude oil prices have rebounded modestly from recent lows. WTI crude is trading near $90 a barrel, while Brent remains above $100. Any renewed escalation in geopolitical tensions could push oil prices higher and weigh on risk appetite, adding to concerns over India's inflation and external balances.

The Reserve Bank of India’s Monetary Policy Committee decision due later today is likely to be the key domestic catalyst. Investors will focus closely on the policy stance and forward guidance, particularly against the backdrop of August CPI inflation at 4.82%, which has reinforced concerns over inflationary pressures. Elevated crude prices remain an additional external risk, with implications for both India’s inflation trajectory and current-account position.

Technical View

Nifty 50

Nifty 50 continues to extend its recovery, indicating improving buying interest following the recent oversold conditions. On the upside, 22,800 remains the immediate resistance zone. A sustained breakout and close above this level could strengthen the recovery momentum and pave the way for a move towards the crucial 23,000 mark. The 23,000 level is likely to remain a significant hurdle, and a decisive breakout above it would be important for the broader trend to turn more positive.
 
On the downside, 22,600 remains the immediate support, followed by 22,400. A decisive break below 22,600 could weaken the ongoing recovery and bring the lower support levels back into focus. Momentum indicators have also shown a marginal improvement, suggesting some easing in the recent downside pressure. The near-term technical outlook has improved to cautiously positive, although the broader trend remains under pressure. Sustained trading above 22,800, followed by a decisive breakout above 23,000, would be crucial to confirm a stronger and more sustainable recovery.

Bank Nifty

Bank Nifty is showing signs of improving short-term momentum, although the upside remains capped near the 55,200 region, which has acted as a key resistance zone over the past few sessions. A sustained breakout above 55,200 could strengthen the ongoing recovery and pave the way for an upward move towards the 55,800–56,000 zone. A decisive breakout above 56,000 would provide stronger confirmation of a broader improvement in the technical structure.  
On the downside, failure to sustain above the 55,000 level could lead to renewed selling pressure, with 54,500–54,400 emerging as the immediate support zone, followed by the psychological 54,000 mark. The near-term technical outlook for Bank Nifty remains cautiously constructive. Sustained trading above 55,200 would strengthen the recovery momentum, while a decisive break below 55,000 could signal renewed weakness and bring the lower support levels back into focus.